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Dolby Laboratories, Inc. (DLB - Free Report) recently inked a strategic partnership with Beijing Tahoe Film and Culture Development Co., Ltd., a subsidiary of Tahoe Group, to augment the cinematic experience in China. Tahoe Group operates as a mainland listed real estate firm with diversified businesses in healthcare, education, film, finance and other fields.

Per the deal, Tahoe Cinemas would open 10 Dolby Cinema centers across the communist nation, extending the premium cinema viewing experience to more moviegoers across the country. With the deal, the Dolby Cinema experience will expand its presence in China, reinforcing the strategic importance of the region in its future growth strategy.

Dolby Cinema brings in an unmatched cinema-viewing experience through Dolby Vision and Dolby Atmos along with a rich combination of advanced technologies that make audience feel a real-life aura of the onscreen action. The Dolby Vision laser projection system leverages state-of-the-art optics and image processing facilities to deliver unrivalled dynamic range with enhanced color technology and a contrast ratio. This produces strikingly vivid and realistic images, making viewers feel more connected to the movie settings. On the other hand, the Dolby Atmos immersive audio technology helps to feel the sound clarity, moving sound around audience in three-dimensional space to get the real-life feeling of any action sequence.

Dolby Cinema technology is proving to be a major profit churner for the company. During third-quarter fiscal 2018, Dolby added more Dolby Cinema screens, bringing the aggregate to 160 screens across the world. Currently, Dolby Cinemas’ client list includes AMC in the United States, Wanda and Jackie Chan in China, Cineplexx in Austria, REEL in Middle East and Vue in the Netherlands. Dolby Cinemas is enjoying exponential market traction and plans to bring Dolby Cinema to the U.K. for the first time with Odeon Cinemas Group.

The content pipeline for Dolby Cinema continues to grow with more than 180 titles in Dolby Vision and Dolby Atmos announced or released. Majority of Dolby Cinemas are with AMC and the latter is targeting 160 by the end of calendar 2018. Wanda Cinema Line Corporation has plans to open 100 Dolby Cinema locations by the end of 2018. Dolby Cinema continues to add new partners in China. CGV plans to open 30 locations in China while HuayiBrothers plans to open in 10 locations. Combined with Dolby’s existing partners in China, Wanda and Jackie Chan, the company now has more than 140 screens open or committed in China.

Moving forward, Dolby believes that surging demand for premium viewing experiences will fuel growth for Dolby Cinema over the long haul. Market reports suggest that consumers are increasingly viewing video content on smartphones, tablets and computers, which in turn, is expected to unlock opportunities for Dolby.

The company has outperformed the industry in the past year with an average return of 11.6% compared with 4.1% growth for the latter.

Sony has a long-term earnings growth expectation of 10.1%. It pulled off a four-quarter average positive earnings surprise of 44.7%.

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